IRS Auditing 100,000 Home-Buyer Credit Recipients
If you are looking to take the $8,000 Home-Buyers Credit you better have you ducks in a row according to reports coming out of Washington. The IRS is going to be paying special attention to those taking the credit on their taxes.
The powers that be in Washington are smart, never forget that. And craft. And sneaky. So you go and buy a home and qualify for the credit. Congratulations.
But now you have to worry about applying for it because what if you made a mistake on your taxes. You know the code is only 67,204 pages long? And if you do anything that is considered in the gray area and they find it you could be opened up to a full audit going back a number of years.
And it is interesting this story did not come out 6 months ago when the government needed the housing market stimulated. Instead it is coming out when the program is winding down and the government is going to have to pay out the money they promised.
It reminds me a bit of the stings that the police do. You know, the ones where they call criminals up that they have not caught yet and tell them they won Super Bowl tickets. Then when they show up to claim the prize they are arrested?
Instead, it is the government offering money for a reason and then threatening an audit the minute you apply for the money.
The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program.
The measure, adopted in February as part of the economic-stimulus bill, gives first-time buyers an $8,000 tax credit in an effort to boost sales and stimulate the moribund housing market. The program is set to end Nov. 30, but housing-industry leaders are lobbying Congress to extend it.
More than a million claims for the credit have been received so far, and housing-industry experts estimated that the credit has helped generate about 350,000 home sales that wouldn’t otherwise have occurred. But some lawmakers and tax experts now say there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent. via WSJ.com.
I like your analogy in this article. The real estate economy really is like a patient who you cannot ...
Real Estate is hyper-local. Every market is different. Phoenix has already hit bottom and is starting to recover. We have ...
Great to hear that the big boys
are predicting recovery sooner than
most think.
Thanks for the value! 
I agree--good analogy. You have to crawl before you can walk. Right now, at least in Austin, many people would ...
I live in the Philippines and I am glad we are not on the lists... 
I have a few Litograghs of Presidents homes , made by Richard V. Sebring. yr. 1990 Do they have any ...
I see the question I have, but no response. I do not have a for sale sign up ...
I'll add mine to the list too. This is happening in Kansas City, Missouri as well now.
We already knew ...
Comment by Stephen Davis on 20 October 2009:
I have heard estimates that the 350,000 homes equals about $43,000 tax credit per home since the rest would have occurred anyway. Bad deal for the tax payer. http://toughmoneylove.com/2009/10/20/fraud-waste-first-time-homebuyer-credit/
Comment by Bob on 20 October 2009:
I’m wondering how much it will cost to review 100,000 tax returns. I’m not saying that people who defraud the government should get away with it but it seems that it will be expensive to review, then audit, the prosecute.
Comment by Eddie on 21 October 2009:
Again with the alarmist attitude! What’s with you lately? No one is “threatening an audit the minute you apply for the money”. It’s nmore like “there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent”.
Geez, you’re starting to use Fox News tactics.
Comment by Matthew Hardy on 21 October 2009:
> interesting this story did not come out 6 months ago
Indeed. The way we’re getting *the complete opposite* of transparency, I’ll wager we’re in for more surprises.
Pingback by $8,000 Housing Tax Credit Screws 100,000 Home Buyers? on 21 October 2009:
[...] all of their tax returns in order and squeaky clean going back a few years because according to The Real Estate Bloggers, the IRS is auditing 100,000 home buyers who applied for the tax [...]
Comment by Portland Real Estate on 21 October 2009:
Good. I bet there is a lot of fraud and I am glad that they are watching for it and investigating what they can. People who abuse the system need to be punished very harshly.
-Tyler
Comment by Eddie on 22 October 2009:
Fraud Reported in Program to Help New Homebuyers
http://www.nytimes.com/2009/10/23/us/politics/23housing.html
Those poor fraudsters. I sure hope the IRS does not investigage and audit them. Wouldn’t that be awful!?
Comment by Peggy on 31 January 2010:
as a person who qualifies for this credit, it is really disheartening that it’s taken me about 8 months to get to the point where they’ve disallowed my claim because i didn’t respond to their request for additional information. i did respond to their request, sent them everything they asked for, and i sent it certified mail. they received it on Jan 4th and their letter that says they never received it is dated Jan 25th. i originally mailed my forms for the credit last may, but they never received those. i re-applied in september and sent the forms certified. i am not trying to scam anybody, and i spent all of my savings on my down payment. i would not have done that if i didn’t know about the housing credit in the first place.